Bloomberg reports that the Italian fashion house Prada SpA is negotiating the acquisition of the Versace brand from Capri Holdings Ltd. and is close to concluding a deal.
Sources familiar with the negotiations say that the parties have already agreed on the preliminary value of the deal – about 1.5 billion euros (1.6 billion US dollars).
The deal may be concluded in March. However, the terms are still subject to change, and the deal could be scrapped.
Trend reversal
If successfully completed, this deal will set a precedent that breaks a decade-long trend of Italian fashion brands such as Gucci and Valentino being taken over by foreign conglomerates.
Capri and Prada’s silence, shares rise
Capri, which acquired Versace in 2018 for 1.8 billion euros, has refrained from commenting so far. Prada representatives also refused to make official statements on this matter.
Nevertheless, the news of a possible deal has already affected the market: Prada shares on the Hong Kong Stock Exchange rose by 4.1%. The potential acquisition of Versace will allow Prada to strengthen its position and increase competition with such industry giants as LVMH and Kering SA.
Market capitalization gap
Despite its potential expansion, Prada is still far below the market leaders in size. Prada’s market capitalization is estimated at $22.5 billion, while LVMH’s market value is around $347.5-362 billion.